Press Service

On fine-tuning FX swap auctions

From 16 June 2015, the Bank of Russia supplemented its system of monetary policy instruments with USD/RUB and EUR/RUB buy/sell fine-tuning FX swap auctions from 1 to 2 days term. This decision is aimed at expanding possibilities of credit institutions to manage their ruble liquidity and assets eligible as collateral for Bank of Russia refinancing operations.

In case of holding fine-tuning repo auctions from 1 to 2 days term the decision to hold fine-tuning FX swap auctions for similar term will be taken depending on the situation in the money market including the utilisation of marketable collateral. General maximum allotment amount will be established for fine-tuning repo and FX swap auctions. The minimum interest rate on the ruble leg of the FX swaps is set equal to the Bank of Russia key rate, and the interest rate on the FX leg is set equal to zero. A single cut-off rate will be determined as a result of the both auctions.

Fine-tuning FX swap auctions will be held at the organised trading of the PJSC Moscow Exchange. These transactions will be made only by Russian credit institutions.

The Bank of Russia will communicate its decision to conduct a fine-tuning FX swap auction and its timeframe no later than 10 a.m., Moscow time, of the auction day, similar to fine-tuning repo auctions. The timing and other parameters of operations will also be in line with fine-tuning repo auctions. This information will be published on the Bank of Russia website on the day of the auction.

The use of fine-tuning FX swap auctions by the Bank of Russia will contribute to lower demand for FX swap standing facilities, lower volatility of the money market short-term interest rates, their convergence to the Bank of Russia key rate, and, as a result, higher efficiency of the interest rate channel of the monetary policy transmission mechanism.

16 June 2015

The reference to the Press Service is mandatory if you intend to use this material.